European Markets Reverse Early Gains

4/5/2012 7:35 AM ET

The European markets reversed early gains and are modest to moderately lower in afternoon trading Thursday, after U.K.'s manufacturing production fell for a second month and Germany's industrial production dropped more than expected in February. The Asian markets were mixed, while the U.S. index futures are lower.

France raised 8.439 billion euros from the medium-to-long term bond auction, almost near the top end of the target range. The debt management agency AFT sold 1.31 billion euros five-year OAT at a yield of 1.96 percent. The borrowing cost rose slightly from 1.91 percent at the prior auction on March 1.

The Euro Stoxx 50 index of eurozone bluechip stocks is losing 1.02 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 0.59 percent.

The German DAX is losing 0.91 percent and the French CAC 40 is falling 0.35 percent. The UK's FTSE 100 is losing 0.40 percent and Switzerland's SMI is losing 0.20 percent.

Sanofi is flat. The drugmaker, along with Regeneron Pharmaceuticals, Inc., said that the Biologics License Application for the investigational agent Zaltrap (aflibercept) concentrate for solution has been granted priority review by the Food and Drug Administration

LVMH, EADS, STMicroelectronics and Technip are in positive territory.

In London, financial firms are mostly down. Man Group is declining 3.9 percent.

Barclays and Royal Bank of Scotland are losing 2 percent each.

Ashmore Group is advancing 3.1 percent after UBS reportedly upgraded the stock.

Burberry is up 0.4 percent. JPMorgan initiated the stock with a "Neutral" rating.

JJB Sports reported a narrower pre-tax loss for the year and announced committed 30 million pounds investment and financing package to tide over the tough times. The stock is climbing over 13 percent.

Food wholesaler Booker Group reported growth in sales and like-for-like sales in the fourth quarter. Profits for the 53 weeks to March 30 remain in line with expectations, the company added. The stock is climbing 3.7 percent.

National Express is gaining 3.1 percent reportedly on a broker upgrade.

In economic news, Germany's industrial production declined more than expected in February, data from the Federal Ministry of Economy and Technology showed. Industrial output dropped 1.3 percent in February from a month ago, offsetting January's 1.2 percent growth. Economists had expected a 0.5 percent decrease.

UK manufacturing production in February fell 1 percent from a month earlier, while expectations were for a 0.1 percent increase, data from the Office for National Statistics showed. However, industrial production increased 0.4 percent month-on-month, in line with economists' expectations.

Bank of England policymakers retained its record low interest rate and the size of its bond purchases unchanged as expected by economists. At the end of two-day rate setting meeting, the Monetary Policy Committee voted to retain the interest rate at 0.50 percent, the lowest since the central bank was established in 1694.